The Finance Bill, 2026 has proposed the insertion of a new Section 292BA in the Income-tax Act, 1961, aimed at ensuring that assessment orders are not rendered invalid merely due to technical defects in quoting the Document Identification Number (DIN).
The proposed section will be inserted after Section 292B and seeks to bring clarity on the validity of assessments where a computer-generated DIN has been referenced, even if there are mistakes, defects, or omissions in the manner of quoting such a number.
Background: Shift to Electronic Tax Administration
With a view to bringing greater transparency in the functioning of the tax administration and improving service delivery, the Income Tax Department has increasingly relied on electronic systems, with most notices and orders being generated through the Income Tax Business Application (ITBA) platform.
However, the Central Board of Direct Taxes (CBDT) observed that in several instances, notices, orders, summons, letters, and other communications were issued manually, without maintaining a proper audit trail. To address this concern, the CBDT issued Circular No. 19/2019 dated 14 August 2019, prescribing detailed parameters for the issuance of all communications by income-tax authorities.
The circular mandated that any communication relating to assessment, appeals, orders, exemptions, enquiries, investigations, verification, penalties, prosecution, rectification, approvals, or any other statutory or non-statutory matter, issued on or after 1 October 2019, must carry a computer-generated Document Identification Number (DIN)prominently quoted in the body of such communication. The DIN framework was intended to ensure traceability, accountability, and a robust electronic audit trail.
Rise in DIN-Related Litigation
Following the introduction of mandatory DIN requirements, a significant number of assessment orders were challenged before appellate authorities and courts on the ground of non-quoting, incorrect quoting, or defective mentioning of DIN. In certain cases, courts invalidated assessments purely on procedural grounds, even when the substance of the assessment was not in dispute.
This resulted in a growing body of litigation centred on technical compliance with DIN requirements, creating uncertainty for both taxpayers and the tax administration.
Expert View: Pending Litigation and Policy Concerns
Commenting on the amendment, tax expert and chartered accountant CA Deepak Gadgil criticised the move, stating that a large number of litigations are currently pending solely on the issue of DIN compliance.
He pointed out that the CBDT had already laid down a comprehensive framework through Circular No. 19/2019 dated 14 August 2019, which clearly mandated that all communications issued by income-tax authorities on or after 1 October 2019 must carry a computer-generated DIN in the body of the communication. According to him, the circular covered communications relating to assessment, appeals, orders, exemptions, enquiries, investigations, verification, penalties, prosecution, rectification, approvals, and other statutory or non-statutory matters.
CA Gadgil noted that instead of enforcing strict compliance with the existing circular, the proposed insertion of Section 292BA appears to dilute the consequences of non-adherence, potentially weakening the discipline sought to be introduced through the DIN mechanism.
What Section 292BA Seeks to Clarify
Proposed Section 292BA begins with a non-obstante clause, overriding any judgment, order, or decree of any court. It clarifies that, for the purposes of Section 292B, no assessment under the Income-tax Act shall be invalid or deemed invalid merely on account of any mistake, defect, or omission in quoting a computer-generated DIN, provided the assessment order is referenced by such number in any manner.
The provision is described as clarificatory, signalling the legislative intent to settle disputes arising from differing judicial interpretations.
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